Many countries provide incentives for businesses to produce environmental accounting reports. For example, the Association of Chartered Certified Accountants (ACCA) in the United Kingdom developed the European Environmental Reporting Awards program in 1997. Currently 12 countries, including the United Kingdom, Denmark, the Netherlands, Belgium, France, and Germany, participate in this program. In Japan, the Global Environmental Forum and the National Association for the Promotion of Environmental Conservation have given Environmental Report Awards since 1997. In addition, Toyo Keizai and Green Reporting Forum have given the Green Reporting Award since 1998. These awards encourage businesses to take responsibility for environmental conditions that affect society's well-being.
Conduct research about corporate environmental disclosures. Choose one company located in Japan and a competitor located in Canada. Go to each company's website and search for information about environmental policies and procedures. Two possible companies are Toyota (www.toyota.ca) and Magna (www.magna.com). Also conduct research to fi nd governmental guidelines for environmental accounting. Go to the website of Environment Canada (www.ec.gc.ca) and search for information about environmental accounting. Now perform a similar search on the website of Japan's Ministry of the Environment (www.Env.go.jp/en/). Skim through the information that you find on each website. These links are also available at www.wiley.com/canada/eldenburg.
In its "Environmental Accounting Guidelines 2002," Japan's Ministry of the Environment identifi ed the following environmental conservation cost categories:
Category................................... Content
Business area cost ....... Environmental conservation cost to control ..............................................environmental impacts that result from key business .............................................operations within the business area
Upstream/downstream cost.........Environmental conservation cost to control ..............................................environmental impacts that result from key business ...............................................operations upstream or downstream
Administration cost.....................Environmental conservation cost stemming from ...............................................administrative activities
R&D cost.................................Environmental conservation cost stemming from ................................................research and development activities
Social activity cost.......................Environmental conservation cost stemming from ................................................social activities
Environmental remediation cost......Cost incurred for dealing with environmental ................................................degradation
Other cost....................................Other costs related to environmental conservation
REQUIRED
A. Is environmental accounting an ethical issue? Why or why not?
B. Which of the companies you researched provides the easiest-to-fi nd and most understandable information about environmental policies and procedures? Explain.
C. Discuss a company's responsibilities for reporting environmental information to various stakeholders, including shareholders, managers, employees, other companies, government regulators, product customers, and the general public.
D. If one company provides better reporting than a competitor of its environmental behaviour, policies, and procedures, does that mean the company is more responsible than its competitor toward the environment? Why or why not?
E. What factors are likely to affect a company's willingness to publish an environmental accounting report?
F. Discuss possible reasons the governments of different countries place different degrees of emphasis on environmental accounting reports.
G. Discuss ways in which ABC systems could be used to capture information for environmental accounting reports.
H. Discuss ways in which the process of preparing and publishing an environmental accounting report is likely to help a company reduce its environmental costs.
I. Should all governments require companies to publish environmental accounting reports? What values did you use to arrive at your conclusion?